Reasons for Recovery in the Indian Stock Market on March 5th and 6th, 2025

The Indian stock market has rebounded since March 5, 2025, driven by multiple factors.

Performance of Nifty 50(India) between March 4th -6th, 2025

Sensex and Nifty indices surged, supported by strong buying across sectors due to the following reasons

  • IT stocks led the recovery, with companies like Coforge and Persistent Systems gaining significantly due to positive growth outlooks
  • Metal stocks also rallied, benefiting from declining oil prices and improved global sentiment
  • Midcap and small-cap indices saw robust gains, reflecting investor confidence in undervalued stocks
  • The Reserve Bank of India’s liquidity measures, including bond purchases, further bolstered market sentiment

Liquidity Injection on March 12th and March 18th, 2025 (Ref)

  • Sectors like auto, PSU banks, and realty also experienced notable recoveries, driven by value buying and favorable macroeconomic indicators

A recovery of ~3.5% in Nifty Auto over the past 3-days

  • Easing global trade tensions and optimism around China’s economic growth contributed to the positive momentum
Optimism towards 2nd Largest Economy despite tariff threats and slowdown worries (Link)

Overall, the market’s rebound reflects a combination of domestic policy support and improving global conditions.

Continued Growth in Challenging Environment for India (Ref)

Direction to Mid & Long-term Investors: Wait and Watch before making fresh huge allocations

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